PKP2B coal contract renegotiation stalled

The target by the Ministry of Energy and Mineral Resources to conclude contract renegotiation process with coal miners holding the PKP2B coal contract of works by the end of this year may fail to be realized as 12 PKP2B holders have opposed one the six main points of contract renegotiation proposed by the government, while two others are facing internal problems, Bisnis Indonesia reported on Tuesday.

?The deadline is end of the year, there will certainly be a decision taken by the government on companies which have yet to conclude the renegotiation,? said Director of Coal Management and Development at the ministry, Bambang Tjahjono Setiabudi, acknowledging that terminating the contract could be an alternative. He did not provide further details.

There are a total of 73 coal miners holding the PKP2B contract, of which dozens of have already signed MoUs on the conclusion of contract renegotiation process.

Investor Daily quoted Bambang as saying Tuesday that the most difficult was to conclude renegotiation process with coal miners holding the PKP2B first generation and third generation contracts particularly due to the proposed changes on financial obligations to the state.

In contrast, Bambang said the holders of the PKP2B second generation contract are more ready to amend their contracts following the signing of MoUs on the conclusion of mining contract renegotiation.

He said that the ministry was hopeful to be able to sign the amendment of contract with a number of coal miners holding the PKP2B first generation contract by end of this month.

Coal miners falling in this category include PT Burneo Indobara, PT Mandiri Inti Perkasa, PT Jorong Baru Utama Greston, PT Purbaindo Coal Mining, PT Kartika Sela Bumi Mining, PT Riau Bara Harum, PT Antam Gunung Meratus, PT Marunda Graha Mineral, and PT Indexsim Coalindo. (*)